Tips For Getting Those Last-Minute Tax Deductions
MINNEAPOLIS (WCCO) — The holiday season isn’t exactly known as a time to talk taxes. Maybe it should be.
At Goodwill’s across the Twin Cities, donations are up 15 percent as people attempt to get last minute tax deductions for 2011.
“It’s actually a good time of year because people are trying to unload things in their home and get that last-minute tax write-off as well,” said Lisa Ritter of Goodwill.
Those write-offs can come in all shapes and sizes. Receipts are needed for cars and clothing, and the donor can write down what they think clothing items are worth. That might be obvious, but how about asking your employer to delay an end-of-the year work bonus until January?
“It might be worth delaying it if possible. Delaying it to 2012 so you get another 12 months before you have to pay tax on it again,” said Jeff Bergerson of Bergerson Tax Services.
If you are a homeowner in need of a new water heater or windows, buying those energy-efficient items in the next few days may be worthwhile. You can get a $500 deduction on a new water heater and a $200 deduction for windows.
To find out if those items are energy efficient and tax deductible, you can visit the website energystar.gov. It shows you what to buy and where.
There is also the matter of making good on a bad stock investment. For example, if you bought stock in a corporation for $10,000 and it’s now worth $7,000, it’s not a total loss.
“You could sell it now for $7,000 and take a $3,000 loss and lower your income by $3,000. Thus, you are going to owe less taxes on that,” said Bergerson.
Bergerson said keep receipts for your donations and even take pictures of them if you can, in case there is an audit.
And if you donate a car, your deduction will be based on what the charity sells it for. If they don’t sell it, then it goes by fair market value or blue-book value.